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Risk is always a consideration when changing jobs. What are the downsides of making this move and is this a risky move for me?

Usually when you hear the word risk, reward is not far behind. With job change, the reward does not necessarily increase along with the risk.

So first, let’s look at what the downside could be when making a job change. First we should note that when someone is just getting going in their career, there really isn’t much risk to any job move you make.

1. low job security: Once you realize that your job security is not provided by the company you work for you will realize that a job change is not risky in that sense. Your job security is derived from your skills and value in the market. If a company is having financial problems, you can move along if you have built up your career equity. The risk is more about the fact that it is a pain and inconvenient to look for another job when you weren’t planning on doing so.

2. skill atrophy: For example, if you move to a company that is using legacy or proprietary technology then the risk is that you are limiting your options in the market and not growing your knowledge and skill set. Interestingly, skills can atrophy if you stay at the same job too long as well.

3. network dilution: If you are the best performer in your group or company and no one challenges you or motivates you to higher performance you risk losing your “edge”. Cultivating a network where you are the star does not provide you with the kind of reference network that will increase your value in the market. Chances are you will sink to the level of your peers if you stay around them too long. The risk is that your value will decrease with the quality of your references.

The other kind of risks are related to the “fit” of the specific job change you are considering. In this case both you and the company have risks.

The important relationship to consider is the inverse relationship between a risk hire and the quality of the company. Companies assume risk when they hire someone to do a job they have never done before. The risk is; will the new hire be successful at the new position, will they come up to speed soon enough and how much resources will be required to get them productive. If you analyze why a company would offer you a “risk fit” job, at some point you will ask the question, why couldn’t they hire someone that is qualified for that job? The answer will be that the quality of the company cannot attract qualified candidates.

The risk to you is similar, will I be able to perform this job at a high level? A case can be made that a good strategy is to move to a new company in a position that you know you will excell. Then grow into new roles and responsibilities once you are a known performer and the promotion can be done with less risk on both sides.

The point is not that you shouldn’t make risk moves, sometimes it works, but be aware of what you are getting into by taking a job you have never done before.

In general, great companies hire people that are qualified and a company that gives you a promotion and a job you have never done, may have some downside issues to be aware of.

So risk can be managed by understanding the downsides and the factors involved in a job change. With this knowledge you can make the decisions that will minimize your risk appropriate to the goals you are trying to achieve.

We believe that a start up increases career equity more than a larger company. Value is somewhat based on perception, and the perception in the market is that only the top 20 percentile quality people can work at a start up.

Data Points:

Working with people better than you brings out your best.

Which reference do you think will be more valuable? Paul Buchheit or Joe Blow from Acme Big Company?

You get more experience and have more accountability at a start up, which translates to more accomplishments.

Start ups are typically ahead of the curve with respect to up to date tools and technology. The more leading edge your skill set the less people to compete with and therefore more opportunities.

Bottom Line: If you are motivated to get up in the morning and get to work on your project, you are in a good situation. But for maximum career value, work in a start up.